Megadyne and Ammeraal acquired in €2bn deal

19 July, 2018

Partners Group, the private markets investment manager, is buying two industrial belts businesses – the Italian group Megadyne and the Dutch firm Ammeraal Beltech. The combined value of the two transactions, which both include investments from their management teams, is €2bn. Partners Group is buying Ammeraal from Advent International (which acquired it in 2015), and Megadyne from its owners the private equity firm Astorg, the investment manager Fondo Italiano di Investimento, and the Tadolini family, which has run the business since Corrado Tadolini founded it in 1957.

In a separate move, Megadyne is acquiring the UK-headquartered power transmission specialist, the Challenge Group, which has operations in Ireland, Australia, South Africa and China. The deal includes its South African distributor, Sprockets & Chains.

Partners Group says it is acquiring Megadyne and Ammeraal “on behalf of its clients”. It adds that once the deals have closed later this year (subject to anti-trust clearances and other regulatory approvals), it plans to support a merger of the two companies, which have complementary product and service offerings. It predicts that the potential merger will benefit both companies and their clients, creating a full-service provider across specialist industrial transmission belting and lightweight conveyor belting.

“Megadyne and Ammeraal both operate in highly attractive markets and benefit from increasing industrial automation in many industry verticals across the world,” says Pascal Noth, managing director of Partners Group’s Private Equity Europe operation. “We have admired the two businesses for many years and this is an exciting moment to support the new industry champion going forward. We are honoured to partner with the Tadolini family as shareholders and look forward to working with the excellent leadership teams at Megadyne and Ammeraal."

Megadyne develops and manufactures polyurethane and rubber belts for power transmission and conveying systems, as well as complementary products such as rubber hoses and metal pulleys. Its headquarters are in Turin, and it serves more than 30,000 customers from 15 manufacturing plants and 33 distribution centres around the world. The company employs more than 2,300 people and in 2017 generated sales worth €319m.

Ammeraal manufactures, distributes and maintains light-weight process and conveyor belts for applications including food manufacturing, baggage-handling, logistics and textile production. Headquartered in Alkmaar in the Netherlands, the company supplies more than 30,000 customers in over 150 countries. It employs more than 2,600 people and generated a turnover of €385m in 2017.

“Today is an important milestone in the history of the company my father founded over 60 years ago,” says Megadyne’s CEO, Giorgio Tadolini. “We see a strong cultural fit with Partners Group and also with Ammeraal and believe the planned merger could cement a lasting legacy for both companies, which is why the Tadolini family has chosen to reinvest into this acquisition.

Following its acquisition of Megadyne and Ammeraal Beltech, Partners Group plans to merge the businesses

“Given recent industrial trends,” he adds, “we are convinced that numerous growth opportunities still lie ahead of us and look forward to benefiting from Partners Group's proven track record of investment in the industrials sector as we aim to capture this growth.”

Ammeraal’s CEO Prakash Iyengar comments: “Both Ammeraal and Megadyne are equally strong brands that customers associate with quality, reliability and innovation. The product portfolio is complementary and so is our global reach in key markets. I am confident that we can leverage our mutual synergies, organisational talent and disciplined operating model to create customer value and accelerate growth globally.”

Megadyne says that its acquisition the Challenge Group will give it “competitive advantage” and consolidate its global position in the power transmission sector, as well as boosting its market share in some regions. Wolverhampton-headquartered Challenge, which has almost 40 years of producing power transmission products, was the first foreign company to manufacture and export transmission products from mainland China, 35 years ago. It now stocks more than 8,000 lines of power transmission products and sells them in more than 70 countries. The company’s management team, staff and branch locations will not change as a result of its acquisition by Megadyne.